Dell has nearly doubled its annual profit growth target for the next four years, raising expectations for adjusted earnings per share growth to at least 15% from around 8%, driven by robust demand for AI infrastructure.
The computer manufacturer lifted its compounded annual revenue growth forecast to between 7% and 9% for the next four years, up from its prior view of 3% to 4%, reports Reuters.
The company’s shares surged nearly 3% in early trading following the announcement on Tuesday. Dell supplies servers to major AI customers including Elon Musk’s xAI and cloud computing provider CoreWeave.
Strong demand for servers providing computing power for generative AI services such as ChatGPT has positioned Dell as a major beneficiary of the AI infrastructure boom. The revised profit growth target addresses investor concerns about margin pressures from competition in AI servers and high production costs.
“Customers are hungry for AI and the compute, storage and networking we provide to deploy intelligence at scale,” said CEO Michael Dell.
The company maintained its third-quarter and annual forecasts whilst reiterating its August projection of $20 billion in AI server shipments for fiscal 2026.
Dell expects long-term compounded annual revenue growth of 11% to 14% for its infrastructure solutions group, which includes storage, software and server offerings. This compares with previous expectations of 6% to 8%. The infrastructure division houses the company’s AI server business, which has driven the upward forecast revision.
The client solutions group, which includes personal computers, continues to face challenges from strong consumer market competition. Dell maintained its revenue growth expectations of 2% to 3% for this division despite its strong position among enterprise clients.
The company anticipates benefiting from a PC refresh cycle after Microsoft ends support for Windows 10 next week, as users and organisations upgrade to maintain security and access to latest features.
